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Full text of "The Drink problem in the economic set-up"

The Drink Problem 

IN THE 

Economic Set-up 



Leaflet Number 3 



l!i' 



THE CANADIAN TEMPERANCE FEDERATION 
30 BLOOR ST. W. TORONTO 



THE DRINK PROBLEM 

IN THE 

ECONOMIC SET-UP 



In its general effects on society alcohol has 
been aptly described by Dr. Harvey Sutton, 
of Sydney, in the statement that "Alcohol is 
not so much an individual criminal as a mem- 
ber of a gang of human enemies, disease, 
poverty, vice, crime, fatigue, and over-exer- 
tion. We may call it the 'confidence man' of 
civilization, taking people down by asso- 
ciation with their social pleasures, a jolly 
good fellow who leaves its victims penniless 
and victimized." 

In this brochure we endeavor to suggest 
something of the social injury and economic 
weakening that is due to the depredations 
of this gentleman. 

The term "economic" as we employ it com- 
prises the creation and distribution of wealth 
and its exchange for other wealth or desir- 
able services. The enquiry in hand is as to 
whether the consumption of alcohol increases 
the wealth created, assists in its equitable 
or adequate distribution and facilitates that 
exchange of goods and services which sus- 
tains and enriches a nation's life. 

BRITAIN'S LIQUOR CONSUMPTION 

This problem is important because in re- 
cent years the consumption of liquor has been 
increasing in Canada. In England the quan- 
tity of alcohol consumed has markedly de- 
creased as compared with that of 1913. Due 

Page One 



to the Great War experience, restriction of 
hours, high cost through heavy taxation, 
development of sport and outdoor life, and 
extensive educational effort, Britain has, in 
recent years, been drinking only about one- 
half the absolute alcohol consumed imme- 
diately prior to the Great War. This relative 
reduction with its resulting sobriety is, no 
doubt, one reason why Britain has tended 
to move slowly in the limitation of the liquor 
trade in the present war despite the lessons 
of 1914-18. 

Nevertheless, it is admitted by thoroughly 
non-partizan authorities that from the econ- 
omic viewpoint Britain is still drinking far too 
much liquor. Lord Dawson of Penn, who is 
occasionally quoted in support of the use of 
liquor, speaking in the House of Lords in 
1927, said: "It is common ground that the 
consumption of alcohol in this country is far 
too great and it is likewise common ground 
that the nation spends far too much on 
alcohol." 

The Royal Commission on Licensing in 
Great Britain, on which the trade was ably 
represented, the findings of which appeared 
in 1931 states: "We are bound to report that 
the evidence which we have received has 
left upon us the definite impression that a 
substantial reduction in the present expendi- 
ture on intoxicants by all classes is strongly 
to be desired." 

CANADA'S LARGE LIQUOR OUTLAY 

In contrast to Britain, Canada has tended 
to increase her consumption and has develop- 
ed facilities for the distribution and sale of 
liquor which have greatly accentuated the 
trend in that direction. 

Page Two 



The Canadian Temperance Federation on 
the basis of the various Liquor Board and 
Commission reports throughout Canada has 
calculated the expenditure for legally pur- 
chased liquor at $179,338,354.18. This is a 
very conservative estimate. It does not cover 
illegal sales. It does not allow for certain 
overages in actual sales which substantially 
increase receipts. 

It is therefore, we believe, fair, with Mr. 
R. B. Hanson, leader of the Conservative 
Opposition, to speak as he recently did at 
Ottawa in the House of Commons, of the cost 
of liquors consumed in Canada as approxi- 
mately $200,000,000. 

The volume of this expenditure and its 
effect on economic life may be better appre- 
ciated when compared with the outlay for 
other commodities. 

COST OF LIQUOR vs. COST OF BREAD 
SHOES, ETC. 

The value of the gold produced in Canada 
in the year 1939 is given tentatively on a 
basis of $35.00 per ounce as $184,000,000. 
This asset in the nation's bookkeeping was 
entirely matched by our unproductive drink 
expenditure. 

The most recent record available at this 
writing of the value of manufactured pro- 
ducts in Canada is for the year 1937. We 
give below the gross value of severel items 
of production. This is the wholesale value 
or factory cost as furnished by the Canada 
Year Book. To afford more accurate com- 
parison we have calculated approximately 
corresponding retail values of these com- 
modities at the average spread. 

Page Three 



Approximate 

Factory Value Retail Value 
Bread and other bakery 

products $ 76,462,891 $ 95,578,576 

Clothing, factory made 

(Men's and Women's) 106,859,925 140,260.898 
Boots and Shoes 

(leather) 41,088,713 61,633,070 

Butter and Cheese 124,935,055 143,675,313 

Slaughtered Meats 181,409,311 206,761,639 

When one considers these figures, one 
gains some slight conception of the inroad 
our drink trade makes on Canada's purchas- 
ing power, and how seriously it competes 
with more essential production. 

Leaving aside for the moment the $55,000,- 
000 revenue which our governments, domin- 
ion and provincial, gather from the liquor 
trade, it is indeed difficult to justify this 
expenditure on any wise economic basis. 

A POOR NATIONAL INVESTMENT 

The investment of money in liquor is a non- 
cumulative investment. It cannot increase 
productive power. It does not add to savings. 
It does not result directly or indirectly in 
any product capable of exchange. On the 
other hand, it has associated with it an en- 
tail of damage and destruction that in the 
total is a very serious discount on national 
well-being. 

THE LIQUOR TRADE IS A RELATIVELY POOR 
EMPLOYER OF LABOUR 

The proportional employment of labour per 
million dollars invested in various types of 
manufacture based on the figures of the 
Canada Year Book, 1939, is as follows: 

Page Four 



Persons 
Employed 

Bakery Products 365 

Rubber Goods 155 

Boots and Shoes 566 

Clothing, factory made — Men's 

and Women's) 566 

Beer 62 

Whiskey 38 

THE LIQUOR TRADE PAYS RELATIVELY POOR 
WAGES 

Dr. Weeks quotes Canadian statistics as 
follows: 

"In 786 printing establishments producing 
an average value of $2,159.00 per employee, 
of each $100 expended $59 went in wages 
and salaries. In 529 clothing factories pro- 
ducing $1,616.00 per employee, of each $100 
expended $63 was spent in wages or sal- 
aries. In 57 breweries yielding $4,755.00 per 
employee, out of each $100 expended $29 
was for wages and salaries." 

IT DOES NOT PROPORTIONATELY ENRICH OTHER 
TRADES 

The value of raw material employed per 
million of capital invested in — 

Making bread Is $ 700,000 



Rubber goods 
Making shoes 
Making clothes 
Producing beer 
Producing whiskey 



572,000 
756,000 
1,269,000 
283,000 
125,000 



IT IS NOT A GOOD DISTRIBUTOR OF WEALTH 

Canadian statistics as to brewers' profits 
are not available. The following figures as 
to profits are from Britain and give the pro- 

Page Five 



fits for three years in the brewing trade as 
shown by the Income Tax Report to be as 
follows: 

(approximately) 





£ 


$ 


1935-36 


26,000,000 


125,000,000 


1936-37 


28,500,000 


135,000,000 


1937-38 


31,500,000 


150,000,000 



These figures are less cost of wear and tear 
but do not deduct excess profit or corporation 
taxes. 

In the industrial organization which sus- 
tains and enriches a nation the liquor -trade 
must be regarded as a minor and even a 
very doubtful factor. The diffusion of wealth 
among those participating in the process is 
comparatively limited and extremely un- 
equal. 

HEAVY COUNTER ACCOUNTS 

On the other hand, there are very large 
counter accounts which society must charge 
against the liquor interests in any estimate 
of the economic value of the manufacture 
and distribution of alcoholic drinks. 

ALCOHOL PRODUCES POVERTY 

There is, first of all, a relation to poverty. 

The problem of poverty rests back on many 
and varied causes — native capacity, train- 
ing, health, social incentive, industrial oppor- 
tunity, and changes in economic distribution, 
etc. Under present conditions there is bound 
to be a layer of chronic poverty at the basis 
of society. Drink extends and deepens that 
layer of poverty. The dissipation of habits 
of thrift induced by drink exposes many 

Page Six 



workers to a knockout blow from what would 
otherwise have been but a temporary dis- 
advantage. 

A very careful estimate is given in the 
Report of the Buckmaster Committee in 
England, a committee of recognized standing 
dealing with social conditions over which the 
late Viscount Buckmaster presided. It states 
"that drink is the predominant cause of sec- 
ondary poverty, that is, poverty in families 
where the income would be adequate to pro- 
vide for all the necessities of life if part of 
it were not expended extravagantly or waste- 
fully. The proportion may be as high as 85 
per cent." 

The Committee of Fifty, a group of scholars 
and others who investigated conditions in the 
United States in the eighteen-nineties and 
chiefly in the North Eastern States, after 
making every allowance for other causes re- 
ported that 37% of the paupers in the aim- 
houses were there because of their ov/n or 
others' intemperance and about 25% of the 
poverty coming to the attention of charitable 
organizations was attributed directly or in- 
directly to intemperance. As to the general 
percentage of destitution and neglect of 
children due to the liquor habits of parents 
or guardians the estimate ran as high as 
45.85%. It is now recognized that individ- 
uals friendly to the liquor interests became 
included in this committee and, it is believed, 
modified its findings. Probably as a result 
of this the findings of its report were con- 
sidered so favorable to the brewers that their 
organization had it placed in libraries, etc. 
Its estimate may, therefore, be accepted as 
being quite within the mark. 

Page Seven 



ALCOHOL A PROCURER OF SICKNESS 

"In a large rubber factory in England, 
4,800 employees are total abstainers with a 
remarkable record of reduction of accidents 
and increased efficiency as compared with 
others as the following table shows" — cited 
from Dr. Weeks. 

Per 1,000 Per 1,000 

Drinkers Abstainers 

18.3 Cases of Sickness 6.3 

1.11 Accidents on duty 0.11 

3.27 Accidents off duty 1.29 

If anything like this proportion obtains 
generally, the loss in time and efficiency in 
production due to drink is a very material fac- 
tor in total production. The burden thus 
thrust upon public charity and personal 
benevolence is very great and even so its 
services are far from adequately meeting the 
human need. Inevitably there are innocent 
victims to whom the cost is calamitous. 

Careful social studies in England reveal 
that the most frequent sufferers from alcoholic 
diseases are found in the upper and middle 
classes. The possession of the wherewithal, 
the social surroundings, and the opportunity 
and the lack of any adequate knowledge of 
the dangers, expose these classes to a serious 
toll. 

In the eighteen-nineties Sir Andrew Clarke 
was the medical head of a London hospital 
patronized by the aristocratic and well-to-do. 
With such opportunities for observation he 
expressed the view that "More than three- 
fourths of the disorders in what we call 
fashionable life arise from the use of alcohol." 

No one would contend that among average 
citizens on this continent the proportions 

Page Eight 



would at all approach these figures but the 
statement cited reveals a danger. 

In society generally a considerable toll of 
sickness is traceable to drink. There are 
chronic diseases, the chief cause of which is 
alcohol, and there are debilitated conditions 
to which it ministers. 

Alcohol lessens the power of resistance to 
disease. Dr. Haven Emerson, professor 
emeritus of Columbia University and one of 
the very highest authorities on public health 
on the continent, made this statement in a 
public address in Toronto: "No other poison 
causes so many deaths or leads to, or intensi- 
fies so many diseases, both physical and 
mental, as does alcohol in the various forms 
in which it is taken." 

A similar statement is attributed to Dr. 
Emil Bogen, a distinguished pathologist at 
Olive View Sanitorium, California. 

INSURANCE COMPANIES' EXPERIENCE 

Both the experience and the attitude of our 
insurance societies point to an intimate rela- 
tion between indulgence in alcohol and dis- 
ease and even the shortening of life. From 
many records we select the following: 

Mr. Percy Evans, President of the American 
Institute of Actuaries, gives as the result of 
a study of 286,392 policies reaching from 
1885 to 1915 and involving 30,069 deaths, the 
following figures. Of the expected mortality 
according to the Mecheo-Acturial Table of 
Mortality the actual mortality of the various 
classes given below was as follows: 

Total abstainers 84.% 

Moderate users 97.2% 

Regular beer drinkers 111.3% 

Regular spirit drinkers 128.9% 

Page Nine 



Indulgence in liquor shortens the tenure of 
life of the average man. 

The North-Western National Life Insurance 
Company of Minneapolis has increased its 
rejections of applicants under 30 years of age 
during the period 1931 to 1936 because of 
using liquor from 11.9 in 100 to 33.7 in 100, 
an increase of rejections of 183%. For all 
ages the increase of rejections has been in 
those years 35%. These figures refer to users 
in quantities sufficient to make the effects 
appreciable. In the same company the in- 
crease between the years 1932 and 1936 of 
new policy holders under 30 years of age, 
who use liquor is 178%, and for all ages 
110%. 

We sought to obtain from Canadian com- 
panies facts that might reveal the trend 
among our Canadian people. We failed to 
obtain them, but were met with the state- 
ment from the head of a prominent company 
that no doubt a similar trend would be re- 
vealed here. 

The cost of sickness in Canada has been 
estimated at an annual expenditure of 
$310,000,000. If only 20% of this is related 
to drink (this is a percentage taken wholly 
at random) we have a figure of $62,000,000 
involved. The loss in productiveness through 
earlier death cannot be estimated. 

A very definite proportion of the occupants 
of our asylums for the insane is due to drink. 
We are informed that the generally accepted 
figure of first admissions directly due to drink 
has been 10%. This does not include num- 
erous cases where liquor co-operated with 
other causes and helped up the balance the 
wrong way. 

Page Ten 



ROAD ACCIDENTS 

In our day, however, we have an additional 
occasion of damage largely accentuated by 
drink in our automobile accidents. Our latest 
record shows that in 1939 there were in 
Canada 1,545 fatalities in auto accidents. 
The injured reported numbered 24,445. The 
accidents reported total 39,645. Only acci- 
dents involving $50 or more damage or per- 
sonal injury are reported. The record for 
property damage is incomplete. It apparently 
runs upwards of $3,000,000. But who will 
estimate the hospital expenses, and the im- 
paired capacity of the injured, often life- 
long, and the economic value of the lives of 
1,545 Canadian citizens extinguished? Not 
all of this is due to drink though the Hon. 
R. B. Bennett stated that nearly all fatal 
accidents involve liquor. In Canada no 
accurate check exists. From investigations 
made elsewhere it would seem probable that 
at least 40% of all accidents involve liquor. 
There are indications that the percentage is 
considerably higher in relation to the fatal 
accidents and the property losses. 

SPREADING A RACE POISON 

One aspect of disease that affects our 
national life and the future well-being of our 
race is venereal disease. It is beyond all 
question that the spread of this disease with 
its incalculable injuries is largely mediated 
by drink. At a time when multitudes of men 
are removed from ordinary social restraints 
and exposed to vicious solicitation the pos- 
sible effects on themselves and the wider in- 
vasion of our racial life stream by syphilis 
with its untold injury to the unborn constitute 

Page Eleven 



a very serious menace. The state suffers an 
economic loss in lessened production due to 
casual sickness, accidents and premature 
death and a heavy additional outlay for cura- 
tive effort and lifelong care of the victims 
of weakened vitality and mental disease re- 
sulting from venereal disease in the inception 
of which drink is usually present. 

LIQUOR, A CAUSE OF CRIME 

The legalizing of the sale of liquor in 
Canada and the United States has been at- 
tended with an alarming increase of intoxi- 
cation. Convictions for drunkenness in 
Canada have risen from 1 8,9 1 in 1933 to 
36,894 in 1938, the last year of record. This 
is an advance in five years of 95%. It has 
also been accompanied by a serious increase 
of crime. 

The relation of drink to crime is a frequent 
one and one that accounts for an enormous 
measure of misery as well as of monetary 
cost. The Report of the Committee of Fifty 
above referred to, found that in 49% of the 
criminal cases (exclusive of drunkenness) in- 
temperance was a factor, a first cause in 
31%, the sole cause in about 16%. The 
Buckmaster Committee basing its study on 
evidence before the Royal Commission in 
England, published the following estimate: 
"Forty per cent of the common offences are 
attributable directly or indirectly to drink, 
25% of violent crime, 15% of cruelty, and 
25% of matrimonial cases." There is some 
indication that in at least the last particular, 
these figures would be a low estimate as 
applied to Canada. These findings would 
indicate that it is fairly safe to say that at 
least one-third of the crime committed is 
closely related to drink. 

Page Twelve 



If one-third of the cost of our judicial 
criminal procedure, our police cost and the 
upkeep of our gaols, is due to drink, we have 
an enormous unproductive cost, associated 
with immeasurable miseries to add to the 
account against drink. 

There are industries that tolerate conditions 
or that involve conditions conducive to 
poverty and social demoralization, but 
against no other industry can the charge be 
brought that it is the direct and inevitable 
source of poverty, accidents, sickness, crime, 
and gross deterioration of character. The 
charges and discounts which these evils lay 
upon the total national wealth is enormous. 

"NO NET REVENUE" 

The question of revenue might seem to 
afford the liquor trade some basis of respect- 
ability and some ground for justification of 
its existence, but even this, when scrutinized, 
proves deceptive and unsubstantial. 

In Canada the total revenue from liquor 
in the year 1938 was $54,046,769. Our total 
expenditures for liquor is approximately 
$200,000,000. The people spend in a wholly 
non-remunerative expenditure a little less 
than $4.00 for every $1.00 the government 
receives. 

We have already suggested that the exist- 
ence of the liquor trade involves a very large 
social damage involving heavy financial loss 
and serious public burdens. On the other 
hand, its disappearance would accumulate 
financial savings and inject new vigour into 
industry on a very widespread scale. Sr. 
Josiah Stamp, after making an exceedingly 
conservative survey of the situation, esti- 

Page Thirteen 



mates that if only a part of the expenditure 
on drink in Britain went to savings, and as he 
believes it would in case of a change of social 
customs, it would at 2 J/2% amount in a gen- 
eration to £4,000,000,000, nearly $20,000,- 
000,000. The presence of this additional 
capital together with increased expenditure 
for other commodities would so enlarge trade 
as to much more than provide an ample basis 
for revenue. He says that if Britain's liquor 
revenue disappeared over night it would be 
a bit embarrassing, but if the change was 
spread over ten years economists would 
laugh at the problem. 

It was the grasp of these various aspects 
of the problem that made Sir Ronald 
Wilberforce Allen declare: "There is no net 
revenue in drink," and that made the late 
Mr. William Graham, a former Financial 
Secretary to the Treasury of Great Britain 
and President of the Board of Trade, say: 

"Let it be urged as a simple economic truth 
that no amount of subsequent revenue which 
is derived from the liquor traffic will ever 
compensate for the original misdirection of 
the outlay. Remembering my brief experience 
at the Treasury I can speak for every earnest 
student on this question when I say that we 
would willingly abandon every copper of the 
revenue in the sure knowledge that the sav- 
ing to the state in the transaction would be 
immediate and substantial. There is there- 
fore, not the slightest validity in the argu- 
ment that the revenue derived is for one 
moment important. We could abandon every 
copper of it tonight and regarded only as a 
plain business proposition, earn a substantial 
social and financial profit." 

Page Fourteen 



LIQUOR UNDERCUTTING GOVERNMENT 
WAR LOANS 

The Government of Canada is appealing to 
its people, not merely to expand every help- 
ful effort, but to exercise thrift that they may 
sustain the nation and the Empire with all 
possible financial aid. 

This is vitally important. The war calls 
for immense outlays and it is quite possible 
that the supreme test and the deciding factor 
will be the economic endurance of the con- 
testants. In face of this fact does not need- 
less and wasteful expenditure become defin- 
itely unpatriotic? 

The Government has devised special plans 
to make possible the contribution of citizens 
of small means. Savings stamps and certi- 
ficates leading on to possible purchase of 
Government bonds are procurable, and the 
appeal of the Government of Canada alike 
to rich and poor is urgent. 

The sale of stamps and certificates is re- 
ported to have met a somewhat disappointing 
response, hence, the additional effort through 
canvassers to promote sales. There is no 
question that our drinking habits constitute 
a powerful competitor to the appeal for 
national saving to aid the nation's fight. The 
dimes, the quarters and dollars that would 
naturally find their way into the national 
treasury as loans are being swept into the 
till of the beer-room and the liquor store and 
go largely to enrich the brewer and the dis- 
tiller. The citizen owns no war certificates 
and the government gets little cash. 

If the issues at stake in this war are of 
such value as to merit the multiple sacrifice 
of human life, surely they demand the sacri- 
fice of an unwise and costly pleasure and the 

Page Fifteen 



lure of a wasteful and injurious indulgence. 
Every dollar that goes to some useful trade 
instead of into the liquor seller's till will help 
to make more stable the financial framework 
of Canada. It will help to win the war. While 
to use money saved from this wasteful ex- 
penditure to aid the government's war effort 
is to take your place beside Canada's sons 
in the firing line represented, perchance even 
more effectively than if you were present, by 
the powerful and essential weapons of war 
— ships, planes, tanks and artillery. To 
strengthen the economic life of Canada, to 
equip her soldiers, to enable her to stand 
steadfast and strong in this great struggle, 
will you not be one of a great company of 
patriotic citizens joining hand to hand to dis- 
courage indulgence in liquor, and will you 
not for the sake of your fellow citizens, your 
country, and the cause of humanity declare 
your attitude by accepting this covenant? 

MY RESOLUTION 

As an Aid to our National Effort 
and for the sake of others 

I PURPOSE 

TO ABSTAIN from the use of all alcoholic liquor as a beverage 
for the duration of the war and the period of demobilization. 

Date 19 

Name 

Return Stub to Collector 



Name 

Address 

Anyone desiring to make this a life purpose may do so by 
drawing the pen through the words after 'beverage.' 



Page Sixteen